Bank of Montreal’s BMO-T asset-management business has scooped up more than a dozen portfolio managers and equity analysts from CI Financial Corp., CIX-T as the bank continues to aggressively recruit for its Canadian operation after the sale of its European asset manager last year.
On Monday, BMO Global Asset Management announced the addition of a new global-equity team consisting of 13 experienced investment professionals who cover a wide range of global sectors including health care, technology, energy and resources, financials and industrials. The jump by such a large number of managers at one time is a rare move in the industry.
Before joining BMO, the 13 individuals worked collaboratively at CI Global Asset Management, a division of one of the country’s largest independent investment managers, CI Financial. Many of the them had worked together for more than 10 to 20 years at CI, including prominent portfolio managers Malcolm White, John Hadwen, Jeff Elliott, Massimo Bonansinga and Jeremy Yeung.
CI spokesperson Murray Oxby confirmed in an e-mail that Mr. White, Mr. Hadwen and Mr. Elliott no longer work at CI. The managers, he said, oversaw less than one per cent of CI’s assets and the departures were communicated to clients about four months ago. CI declined to comment on any other employee departures but confirmed that the company has had no redemptions resulting from the changes.
For BMO, the 13 new hires are the latest additions to the already more than 50 investment professionals that the bank’s asset-management division has hired in recent months. The asset manager plans to sharpen its focus on North America – especially Canada, where the bank hopes to concentrate more of its resources on business lines where it has better prospects of earning a strong return.
Last year, the bank sold its underperforming European asset-management business for $1.1-billion to Ameriprise Financial Inc. The deal was part of chief executive Darryl White’s plan to cut BMO’s portfolio of non-core businesses and boost the bank’s efficiency ratio – a metric BMO’s investors watch closely that measures expenses relative to revenue – by 64 basis points (100 basis points equal one percentage point).
“We made some pretty important strategic decisions with regard to our asset-management business in Europe and the United States and those were really intentional moves designed to allow us to focus on the areas where we had scale and strong competitive advantage,” BMO Global Asset Management’s chief executive officer Kristi Mitchem said in an interview with The Globe and Mail.
“We’ve made it known in the market that we’re interested in expanding and growing in Canada and that we believe in the strength of our Canadian franchise. That’s attractive to a lot of people, both investors and distribution personnel and product personnel.”
BMO GAM’s chief investment officer, Sadiq Adatia, said Ms. Mitchem’s vision to hone in on the Canadian market was one of the reasons he decided to join the bank last year. Prior to his move, Mr. Adatia was the chief investment officer for Sun Life Financials’ asset-management division.
Now, as he passes the one-year mark with BMO, Mr. Adatia says the bank will continue to look at expanding the global-equity part of the business. While he did not comment specifically on how the bank recruited the 13 individuals, Mr. Adatia said his previous role allowed him to spend a lot of time with “many” fund managers in the country.
BMO’s recent hires, he says, will help broaden the bank’s in-house capabilities in key areas they are looking to grow, such as equities, bonds, quantitative investing, responsible investing, exchange traded funds and alternatives.
“Strong investment professionals get the attention of other strong investment professionals,” Mr. Adatia said. “These experienced professionals have a history of strong performance in the global-equities space, success in growing assets and collectively managed $20-billion of assets under management.”
With more than $320-billion in assets under management, BMO GAM is on target to double its earnings by 2024 – a goal that was set when Ms. Mitchem joined the company in 2019.
To do so, two major areas of focus for Ms. Mitchem are to expand market share of the bank’s mutual-fund franchise against its competitors – the other major Canadian banks – and continue to push the bank’s exchange-traded-funds business, which currently has about $74-billion in assets.
Both of those investment areas will benefit from the shift to active management by many investors in today’s market environment, Mr. Adatia says.
“This is really a strong environment now for active management and a key part of why we’re bringing on all these investment professionals,” he adds. " We’ve gone through a period where passive investing did make a lot of sense but we’re in an environment with high inflation, high interest rates, potential pressure on earnings and housing.
“So this is where active management should really play it out and clients are looking for ways to offset higher inflation and get better returns.”
Other investment professionals joining BMO Global Asset Management on Monday include Hoa Hong, Goshen Benzaquen, Kyle Mendyk, Janice Wong, Alex Yang, Alexander Payne, Shawna McIntee and Edward Durrant-Taylor.
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